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Forclaz Ltd. is a distribution company that just began operations in 2021. The company didnt do a very good job of recording transactions and its now the end of its first quarter and it needs to prepare financial statements for the bank. You are provided with the following information about Forclazs inventory activity for the first quarter of 2021. Forclaz uses a periodic inventory control system and FIFO to account for its inventory. Purchases and sales are both FOB destinations.: a) During the quarter Forclaz took delivery of inventory with an invoice price of $220,000. All purchases were made on credit. b) Suppliers give credit terms of 2/10 net 30. Forclaz takes advantage of all possible discounts but because of its sloppy bookkeeping, there were a number of orders for which the payment deadlines were missed. As a result, the company wasnt able to take $300 of available discounts. c) Merchandise with a price of $3,000 (terms 2/10, n/30) was returned to a supplier because the items were not needed. A cash refund of $2,540 was received from the supplier, which was the amount Forclaz paid, less a $400 restocking fee charged by the supplier. d) Freight charges for deliveries to Forclaz of $6,000 were expensed and paid in the period. e) During the period Forclaz incurred $12,000 in repackaging the inventory (into small bundles). Labour costs were $7,000 and materials for repackaging cost $5,000. f) During the quarter Forclaz spent $22,000 on advertising and promoting the inventory with prospective customers. g) The end-of-quarter inventory count showed $52,000 of inventory on hand, at cost. $6,000 of that inventory had a net realizable value of $5,350. h) The year-end inventory count included $5,400 of inventory that was on consignment from a supplier. i) There was $2,500 of inventory that was in transit to customers at the end of the quarter. The inventory in transit wasnt included in the inventory count. j) At the end of the quarter Forclaz owed $62,000 to suppliers, all of which was eligible for early payment discounts.

Required: Prepare journal entries for each of the items listed above and prepare any adjusting entries that are necessary. Calculate the amount Forclaz should report for inventory on its end-of-quarter balance sheet and cost of goods sold for the quarter. State any assumptions you make, including any accounting policies that arent stated.

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